Prime Minister Scott Morrison has announced the government will extend the time frame and the financial limit of the instant asset write-off scheme.
The scheme currently allows businesses who turnover less than $10 million to write-off an asset worth less than $20,000 in the current years’ tax return. This was initially available until June 30, 2019.
Under the new announcement, the scheme has been extended to 2020 and will be allowed to cover assets up to $25,000.
“Businesses can go out and invest today, whether it’s a vehicle, a piece of plant or equipment, all of it, up to $25,000, immediate write-down,” Mr Morrison said.
Industry groups have welcomed the news however some have called to make the scheme permanent.
Chamber of Commerce and Industry Queensland (CCIQ)’s Head of Industry Dan Petrie welcomes the extension but argues the scheme should be made permanent to make a lasting impact for businesses.
“The cost of the scheme is estimated at $550 million for the 2018-19 financial year and it simplifies the onerous depreciation schedules many small to medium sized enterprises undertake when completing taxation return,” Mr Petrie said.
According to the Australian Tax Office (ATO), around 350,000 businesses have claimed under the scheme in 2016-17, with an average amount being just $11,000.